Happy Thanksgiving from GGB; Newsletter Returns December 4

Billionaires Bet

A group of billionaires led by hedge fund operator and liberal activist George Soros (l.) have taken positions in Caesars Acquisitions Company, a spinoff from Caesars Entertainment (CZR).

Billionaires Bet

Billionaires have always played a part in the casino industry. Kirk Kerkorian, Steve Wynn, Donald Trump, Sheldon Adelson, the Fertitta Brothers and others have built the industry from the ground up. Others have joined by investing in gaming such as Carl Icahn, Sumner Redstone and others.

Last week, it was revealed that the private equity managers that own Caesars Entertainment—billionaires all—through Apollo Global Management and Texas Pacific Group, Leon Black, David Bonderman, Marc Rowan and Joshua Harris, have some prestigious company.

When Caesars spun off a new company, Caesars Acquisitions Company (CAC), to avoid the crushing debt level that prevents Caesars Entertainment from becoming aggressive in the marketplace, it created an opportunity for new investors to get involved with Caesars plans for the future, including iGaming. It was revealed in November that George Soros (above), John Paulson and Leon Cooperman, three of the most successful hedge fund managers ever, have bought into CAC.

Caesars’ stock price (both CZR and CAC) has increased dramatically over the past year, and most analysts tie it to the launch of internet gaming in Nevada and New Jersey. Caesars’ WSOP is the market leader in Nevada, and in New Jersey, it’s second only to Borgata partner PartyPoker. But Caesarscasino.com and Harrahscasino.com have also been successful. New Jersey offers full online gaming, while Nevada is limited to online poker.

The success of online gaming is being challenged by another billionaire, Sheldon Adelson, the chairman of Las Vegas Sands. He says he plans to invest millions in passing a federal law that would prohibit all online gaming, putting together a political action committee called the Coalition to Stop Internet Gambling. The group is also opposing the legalization of online gaming at the state level.

Mitch Garber, CEO of Caesars Acquisition Company, says Adelson is blind to reality.

“What I have heard Adelson say is, ‘I am very rich, and I don’t like internet gaming,’ and those things are true,” says Garber. “But Sheldon’s eyes are closed to the fact that all goods and services are ultimately going to be purchased on the internet.”